Biggest US Banks Sail Through Latest Round of Fed Stress Testing

Financial Daily Dose 6.24.2022

June 24, 2022

Fed officials released the results of the latest round of big-bank stress tests conducted by the central bank, and it found “the largest banks in the United States are well capitalized and could weather a severe economic downturn.” In particular, the Fed’s latest round of testing considered how the biggest 34 banks in the U.S. would fare if their balance sheets faced $612 billion in losses “caused mostly by stress in commercial real estate values and in the markets for corporate debt,” and each of the tested institutions had sufficient capital to “meet regulators’ minimum requirements” - NYTimes and WSJ and Bloomberg and MarketWatch and Law360

And a good thing, too, because at least versions of the tested scenarios aren’t looking quite as hypothetical as it seemed just months ago - WSJ

As expected based on reporting yesterday, the FDA has indeed ordered Juul to stop selling its e-cigarettes on the U.S. market, “a profoundly damaging blow to a once-popular company whose brand was blamed for the teenage vaping crisis.” The decision, which the Agency tied not to youth vaping but rather to “insufficient and conflicting data from the company about potentially harmful chemical s that could leach out of Juul’s e-liquid pods,” came after a multi-year review of the company and its products and practices - NYTimes and WSJ and Bloomberg and Law360

Chair Powell’s day 2 of 2 on the Hill saw the central bank chief affirming the body’s “deep commitment to wrestling down the highest inflation in more than four decades” - NYTimes and WSJ and MarketWatch and Marketplace

A brutal reckoning in the crypto market of late has led digital currency watchers to focus intensely on “another potential vulnerability in the crypto market: Tether, a company whose namesake currency is a linchpin of crypto trading worldwide.” The concern is existential—as the “lifeblood of the crypto ecosystem,” the downfall of stablecoin Tether could take down the entire crypto “façade” if it craters - NYTimes

Ken Griffin is taking his Citadel hedge fund empire to Miami “after more than three decades in Chicago,” following “elevated tensions between Mr. Griffin and Gov. J.B. Pritzker of Illinois, a Democrat, over taxes and the city’s crime rate” - NYTimes and WSJ and Bloomberg

Netflix announced layoffs of an additional 300 workers this week, the “second consecutive month” that the streaming giant has made cuts following its April report of falling subscriber totals and additional anticipated losses - NYTimes and TechCrunch

In a move aimed at increasing diversity, McDonald’s—the world’s “largest fast-food chain”—is retooling “how it awards franchises in the U.S.,” with increased performance reviews for existing franchisees and new rules for legacy ownership - Bloomberg and WSJ

Those needing a change of scenery but hoping to keep it domestic may consider the new-look NOLA, which is currently “seducing visitors with time-tested charms and a few bright new baubles” - NYTimes

Stay safe, and have a great weekend,



The Robins Kaplan Financial Daily Dose features top stories and latest news headlines in financial markets, banking, securities and technology topics.